Why Mumtalakat is staying put

Mahmood Hashim Al Kooheji is also chairman of one of Bahrain’s most successful businesses, Aluminium Bahrain (Alba)

Since taking over the reins of Bahrain’s prized investment arm, Mumtalakat, a year ago, Mahmood Hashim Al Kooheji has been ruffling feathers in an aim to bring it into line with international standards. After casting an analytical eye over the holding company’s 41 investment stakes, the new CEO is — to use a word common in his vocabulary — frank in his assessment.

“There’s a lot of low-hanging fruit in those companies that we can improve. [We can] bring in corporate governance, bring in transparency, improve their efficiencies, do a bit of investment in them,” he tells Arabian Business.

“If you look... worldwide, corporate governance and responsibility is becoming something very important. The private sector is realising they have a duty towards our community. [Since the global financial crisis] people really [have been] saying that this is something the private sector lacked and something they have to start considering. We have some companies that are performing quite well but our ambition is we want them to perform much better, so really we have to put that in front of people and say these are the improvements that you have to prepare, these are what you have to do.”

Al Kooheji, who is also chairman of one of the country’s most successful businesses, Aluminium Bahrain (Alba), admits his reviews of Mumtalakat’s companies have not always been met with enthusiasm. But he is unapologetic.

“When you want to bring in new ideas, initially people are not very open to changes... so you need to take their hand, show them the way, mentor them, really tell them about what’s happening [in terms of] best practice everywhere,” he says. “I remember [when] we were restructuring Alba everybody there thought they were doing fine until you put some international KPIs (key performance indicators) under them and we showed them where they’re doing good, where they’re behind... and people were convinced, ‘okay we see your point, let’s improve ourselves. ’

“Always people realise that there are better ways of doing things. That is the most difficult part, showing people where they can improve themselves, [but] it is enjoyable after that.”

Al Kooheji is also responsible for the controversial restructuring of Gulf Air, which recently announced the axing of 15 percent of its staff — about 600 people — in a bid to save the indebted national airline from going under. Considering a large chunk of the company’s employees are locals, the news would have been hard for the government to swallow but Al Kooheji makes no excuses for the decision. “I admit there were a lot of eyebrows raised [in the government],” he says.

“[But] at the end of the day, people came to the reality the best thing for the company is to restructure the airline commercially and make a profit; that’s the way to move forward.”

The restructuring of Alba was less controversial. The star company of the Mumtalakat portfolio, Alba contributes 70 percent of the country’s non-oil exports and is spending $2.5bn on an expansion that is projected to see aluminium output increase by 45 percent to more than 1,200 tonnes per year.

The investment will represent the largest capital expenditure of a Mumtalakat company but it comes at a time when the price of aluminium has fallen significantly since its peak in April 2011 and companies in Europe and the US have been closing down smelters. Yet Al Kooheji insists the timing is still right. “I know that people think it’s bad for the share price that the value [of aluminium] came down [but] I think it’s the right thing to [invest more into Alba],” he says.